Life Policies - Section 5

What life policy features a level premium and a death benefit that decreases each year?

Decreasing Term. Decreasing term policies feature a level premium and a death benefit that decreases each year over the duration of the policy term.

What is a life policy written as a master policy?

Group. Group life insurance is written as a master policy issued to the sponsoring organization, covering the lives of more than one individual member of that group.

Which type of life insurance policy has a rate of return that may be able to keep up with inflation, provide flexibility while protecting the cash value from market risk?

Index Universal Life. Index universal life guarantees a minimum interest rate to be credited or gains linked to a specific index such as Standard & Poor's, whichever is greater.

Limited Pay Life: charges a level annual premium with guaranteed death benefits to the insured when he/she is 100 years old.

Limited Pay Life: This policy is designed so that premiums for coverage will be completely paid up well before age 100. This type of policy is best designed for someone who doesn't want to pay premiums beyond a certain age.

Which whole life policy insures two or more lives for a premium that is based on a joint age?

Survivorship Life. Survivorship life insures two or more lives for a premium based on a joint age.

All of the following are true regarding survivorship life: face amounts are usually more than one million dollars. offers premiums that are quite low compared to premiums charged for separate policies. well situated to meet the need for cash to cover estate taxes. except:

Survivorship life is a contract that insures one person on the policy and one on a rider. Survivorship life insurance is a contract that insures two people, with the promise to pay only upon the

A term policy is designed to mature upon:

The death of the insured during the insured period. Term insurance pays the death benefit only if the insured died during the specified period of time.

Which of the following is true when comparing whole life with universal life?

The interest rate earned in a whole life policy is fixed and guaranteed. The interest rate paid by Universal life is interest-sensitive and the actual rate paid depends upon what the insurer can earn from year to year.

All of the following apply to universal life? Whether or not premiums are paid the policy stays in force as long as the cash account is sufficient to pay the insurance protection. The policy has both a current and guaranteed interest rate. Premiums can be increase or decrease at the policy owners option. Except?

The policy is considered unbundled as it consists of an increase term and a cash account. The universal life policy is unbundled however it consists of decreasing term and a cash account.

All of the following concerning variable life are incorrect? Variable life policy has a flexible premium. Incorrect AnswerVariable life policies the insurer assumes the risk of the general account. Variable life policy both the cash value and death benefit are not guaranteed. except?

The premium for the variable life policy purchases units. The premium for a Variable life also known as a Variable Whole life policy is a fixed premium that purchases units in the separate account. Though the death benefit is guaranteed the cash value is not.

he death benefit of a whole life insurance policy is:

Fixed. The death benefit of a whole life policy is level which means its fixed at the same amount throughout the policy term.

What term insurance provision is an incentive for an insured to obtain lower premiums?

Re-entry provision. The incentive for an insured to re-enter is that the premiums will typically be lower over the next level premium period than if the policy is simply allowed to renew.

What is the difference between Par and Non-Par insurance policies?

A Non-Par is a nonparticipating life policy. A non-par (stock company) or nonparticipating life insurance policy does not pay dividends to policyowners, but dividends are paid to stockholders.

A term policy where the premium may fluctuate between the current charge and a maximum amount that is stated in the insurers premium table, based on the insurers mortality experience, expenses, and investment return is known as:

Indeterminate level premium term. This is indeterminate level premium term. Non-guaranteed level premium term the premiums are only guaranteed for a limited time period such as five or ten years, after which the insurer reserves the right to increase the premiums. Guaranteed level premium term guarantees the premium will remain the same throughout the policy period.

What is the difference between a jumping juvenile and a regular juvenile life policy?

Jumping juvenile`s face amount increases at a certain age, but premiums remain level. Jumping juvenile is a common juvenile policy where the face amount increases at a predetermined age (usually 21), but the premium remains level.

The Payor Rider is mainly used with this policies?

Juvenile. Payor Rider is mainly used with juvenile policies. If the payor (parent or guardian) becomes disabled or dies, the insurance company waives the premiums until the child reaches a certain age (usually 21).

All the following are true about the term conversion provision : Policy can be converted at any time prior to the insured`s 65 birthday. Companies usually make at least one permanent plan available for conversion. Policy can be converted at any time before 20 years. except ?

Policies being waived must wait 30 days before converting. The policy is not eligible for conversion if premiums are currently being waived.

The statement that does apply to a Modified life policy would be Premiums are lower in the early years of the policy. Premiums are payable to age 100 with one premium increase. The cash value will equal the face amount at age 100. except:

Premiums increase in the early years of the policy however eventually level out. A modified whole life policy is premium paying to age 100 and it has premium increase. The premiums are discounted for the first 5 years

A form of term insurance that provides the policyowner with a reduced premium rate if he/she can requalify by providing evidence of insurability from time to time is referred to as

Re-entry term. Re-entry term is a renewable and convertible term issued at low rates due to extensive underwriting. Upon renewal if the insured submits to being underwritten again they may qualify to keep the rates low. If not there is a maximum rate that can be charged at renewal.

Which of the following are disadvantages to term insurance?

Term policies have no living benefits.

The following types of contracts have a variable version? Whole Life. Annuity. Universal Life. Execpt?

Term. Term insurance does not have a variable version.

all the of the following statements about decreasing term are true? Another name for this policy is mortgage protection policy. The death benefit decreases each year over the duration of the policy term. The policy features a level premium. False?

The death benefit decreases over the policy's term until it reaches 20% of the initial face amount. The amount of death benefit decreases with time and eventually reaches zero; the policy is not renewable. It may be convertible, however.

A Life Agent license will allow you to sell the following the following products without other licenses: Variable Annuities Variable Universal Life Term life insurance with a mutual fund account attached. except:

Universal life policy that has the death benefit linked to the S and P 500. Liking the death benefit to indexes such as CPI or SP 500 is offered by an additional rider and doesn't require a variable license.

Universal Life is a flexible premium adjustable benefit life insurance policy that:

accumulates cash value. Universal Life is a flexible premium adjustable benefit life insurance policy that accumulates cash value.s cash value.

Term insurance is considered:

Temporary with no cash value. Term insurance is considered temporary because it only lasts for the length of time specified in the contract.

All of the following statements about Whole Life are true : Whole life policies builds cash value. Whole life policies are also known as permanent protection. Death benefits and premiums are guaranteed and remain level for the life of the policy. except:

The premium generally lower than most permanent plans. Whole Life policies are also knonw as permanent protection because the policy last for the duration of the life of the insured, or age 100. The death benefits and premiums are guaranteed and wil remainl level for life.

All the following term policies would have a level premium for at least 10 years? except:

10/5 year level. The split tells you the premium is only guaranteed level for 5 years, though the policy is a 10 year policy.

Which of the following policies endow at age 100

Whole life policies and 10 yr pay.

Universal term life insurance policies provide all of the following : Provides for flexible premium payment if they are suffient to keep policy in force. The flexibility to extend their coverage after the initial term period expires up to age 95. Provides a set number of years at a level premium that is comparable to term insurance.

Though it's a hybrid it has the same 31 day grace period as term insurance. The grace period is 62 days which begins with the first day of the first policy month in which both the net cash surrender value and the coverage protection amount, less the policy loan balance are less than zero.

Which of the following policies endow at age 100?

Whole life policies and 10 yr pay. A 10 yr pay is a limited pay whole life and all whole life policies endow at 100. Universal life which is one of the flexible policies are not guaranteed to endow.

Companies rate their policies based on what mode?

Yearly. A life insurance company`s policy rates are based on an annual payment plan so the company can invest a years worth of premiums.

The life insurance policy that is a 20 year pay with a level death benefit and the cash value increases in increments to an amount equal to the face of the policy at 65.

Endowment. This is a 20 pay endowment to 65. The cash value equals the face amount in an endowment before age 100.

Which of the following are false when comparing whole life with universal life? The cash value in a whole life policy is invested into a cash account and universal life is invested into the general account. Universal life provides a structured premium and whole life a level premium The death benefit in a whole life and universal life is fixed. True or except ?

The interest rate earned in a whole life policy is fixed and guaranteed. The interest rate paid by Universal life is interest-sensitive and the actual rate paid depends upon what the insurer can earn from year to year. The interest rate of a universal life is interest sensitive which means that there is a minimum guaranteed rate, however actual performance of the insurer can make the current rate higher.

Whole life policies are permanent plans because they last for the duration of:

The life of the insured or age 100. Whole life policies are also known as permanent protection because they last for the duration of the life of the insured, or age 100.

All the following statements are true about endowments. The period of time that provides protection is called the endowment window. Endowments have a face amount that is payable in one of two ways. Endowments are generally more expensive than other life policies. except?

The living benefits are always paid to the beneficiaries.